The advent of cryptocurrencies proves a new challenge for accountants and others who deal with tax. The inclusion of cryptocurrency interests into tax filing is one of those things that can prove to be a challenge for some. The issue stems from the fact that cryptocurrency is a new technology. This aspect makes it harder for accountants or even plain citizens to track, import and generate reports from all crypto exchanges and other platforms.

Fortunately, there is a lot of crypto tax software available to address these issues. These types of software offer a lot of help in consolidating and making it easier even for non-accounting professionals to track their investment and see their tax obligations.

However, the dilemma now is which software would be best for crypto tax preparation? These are the three most recommended software one can choose from.

LukkaTax

LukkaTax is a “do-it-yourself” crypto tax preparation software designed to optimize your taxable income from crypto trading and help maximize your tax refund. It’s easy to upload transactions from any major exchange, including automated connectivity to Coinbase. The feature-rich software lets the user label margin and/or shorting activity, assign different types of income events to crypto income, as well as correctly apply cost basis to crypto-to-crypto trades and other similar, complex transactions.

When compared to other crypto tax software, LukkaTax offers benefits far beyond its competitors: there is no limit on the number of transactions, exchanges or wallets you can upload data from, the guided experience allows you to breeze through each step- there is also live chat support if you’re ever in need of help, and you can get your crypto tax summary (in multiple accounting methodologies) for free!

Founded in 2014, Lukka is known for developing the world’s first crypto tax calculator, LibraTax. The company also builds software solutions for the largest crypto institutions in the world including crypto hedge funds, accounting and audit firms, wallet providers, mining companies, crypto exchanges, and more. Lukka also made history by being the first crypto company to receive both SOC 1 Type 2 and SOC 2 Type 2 attestations for accuracy and security, respectively.

In addition to LukkaTax, the company launched its LukkaTax for Professionals in late 2019, a crypto tax preparation tool aimed at accounting firms, CPAs, and tax practitioners that cater to individuals with cryptocurrency investments who want professional tax preparation help. LukkaTax for Professionals was part of the company’s strategic alliance with the American Institute of CPA’s subsidiary, CPA.com and is used by some of the largest accounting firms in the world.

This year marks the first time the Internal Revenue Service (IRS) explicitly requires taxpayers to document their virtual currency activities, and they are paying close attention. The agency mandates to report transaction cost basis, proceeds, and itemized gains and losses. LukkaTax is our go-to recommendation for those who want to file their crypto taxes accurately, while also maximizing your tax refund.

Koinly

Koinly aims to simplify the process of tracking cryptocurrencies and tax reporting. The company is composed of crypto investors, engineers, and visionaries who all aim to develop software for tax reporting that caters to those with an interest in cryptocurrencies.

The Koinly software makes it easier for tracking, analyzing, and generating reports of cryptocurrency investments. This crypto tax software features the ability to view total holdings and portfolio growth over time. It also comes with easy importation of transactions from major exchanges and wallets. Last and most importantly, it comes with the ability to churn out cryptocurrency tax reports, which includes a feature that allows for previewing gains and taxes.

The software is in continuous development so users can expect to receive new features that will help address current issues and needs.

Koinly can import data from exchanges, wallets, and blockchains including Binance, Electrum, Atomic Wallet, and CoinVault.

TokenTax

TokenTax is a crypto tax software platform and a full-service cryptocurrency tax accounting firm. It is composed of accountants, software engineers, and finance professionals who are all very invested in the ins-and-outs of cryptocurrency investments. The company was founded by product designer Alex Miles and finance industry veteran Zac McClure.

The TokenTax software features easy integration to any cryptocurrency exchange one can think of. It also comes with functionality to track capital gains, capital losses, and tax liability for every virtual currency transactions. The software also offers crypto tax reports needed by the IRS in Form 8949. It can generate the history of the taxpayer’s crypto trading history to even automatically filling out the form.

The platform makes it easier for accountants to prepare tax filing for their clients with investments in cryptocurrencies. It gives them a dashboard that allows them access to any accounts, use tools like automatic API imports, and tax harvesting among others.